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A Guide to Withdrawing PF and EPF After Leaving Your Job!

22, Feb 2024
A Guide to Withdrawing PF and EPF After Leaving Your Job!

Leaving a job marks a significant life transition, and among the many considerations during this period is the withdrawal of your Provident Fund (PF) and Employees' Provident Fund (EPF). This guide serves as your roadmap to navigate the withdrawal process seamlessly, ensuring that you make informed decisions about your hard-earned savings.

  • You can avoid paying tax on the interest on your PF by transferring it to your new employment.
  • Making sure your post-retirement fund has adequate funds is best achieved by combining all of your PF accounts whenever you move jobs.

Understanding Provident Fund (PF) and Employees' Provident Fund (EPF)

Provident Fund (PF): PF is a savings scheme that both employers and employees contribute to regularly. The accumulated amount, along with interest, serves as a financial cushion for employees post-retirement.

Employees' Provident Fund (EPF): A subset of PF, EPF is a mandatory retirement savings scheme for Indian employees. Both the employer and employee contribute a portion of the salary to this fund.

When To Perform PF Withdrawal?

The total amount in your provider fund (PF) is the sum of your employer's and your contributions, plus interest that has accumulated. The Employee Provident Fund Act of 1952 permits you to take out the entire PF amount and the Employees' Pension Scheme amount (EPS amount) when you resign from your employment after being fifty-eight years old.

If you have retired from your service and been jobless for a continuous two months (60 days), you are eligible to recover the full amount of your pre-retirement benefits even before you turn 58.

After completing ten years of service, you are not eligible to take your PF or EPS balance. By completing the composite form released by EPFO, which will handle your withdrawal, transfer, advances, etc., you can take your PF and EPS amount out. Before initiating the withdrawal procedure, it's essential to keep in mind to consolidate all your previous PF accounts.

PF + EPF Amount Withdrawal-

  • Using an Aadhar card:

 If you possess an Aadhar card, you must submit a Composite Claim Form (Aadhaar) to the EPFO office directly without your employer's authentication of the claim. Your whole PF balance may be deposited into your bank account if you include a canceled check with the form.

  • Without using an Aadhar Card:

You can fill out the Composite Claim Form (Non-Aadhaar) if you do not have an Aadhar card but do have your PF number. You must fill out all the necessary information, including your PAN (Permanent Account Number), and affix two copies of Form 15G or Form 15H if your five-year service tenure hasn't yet ended. You can give your PF account number if you don't have a UAN (Universal Account Number).

The Provident Fund Claim Process: Step by Step

1. Check Your Eligibility:

Before initiating the withdrawal process, ensure that you are eligible. Generally, individuals can withdraw the full amount after retirement or if they remain unemployed for two months.

2. Update KYC Details:

Log in to the EPF portal and update your Know Your Customer (KYC) details, including Aadhar, PAN, and bank account information. It is crucial to complete KYC updates, to ensure a smooth withdrawal.

3. Employer Verification:

Once you've initiated the withdrawal, your employer needs to verify and approve the request. Ensure that your contact details with the employer are up-to-date to expedite this step.

4. Provident Fund Claim Form Submission:

Submit the duly filled Provident Fund claim form to your employer. This form is essential for processing your withdrawal request.

5. Fund Management:

The PF withdrawal process involves fund management by the Employees' Provident Fund Organization (EPFO). The EPFO manages the funds efficiently, ensuring that the withdrawal process adheres to regulatory guidelines.

Pro Tip: Engaging with a financial consultant during this process can offer valuable insights into optimizing your fund management strategy and maximizing your returns.

Financial Planning After PF and EPF Withdrawal

  1. Assess Your Financial Goals: Before utilizing the withdrawn amount, assess your financial goals. Whether it's investing, starting a business, or meeting immediate expenses, understanding your objectives is crucial.
  2. Emergency Fund Allocation: Consider allocating a portion of the withdrawn funds to create or bolster your emergency fund. During unexpected financial hardships, this fund acts as a safety net.
  3. Wise Investment: Find and invest in the areas that align with your future financial goals. From fixed deposits to mutual funds, diverse investment avenues can help grow your money.
  4. Debt Repayment: If you have outstanding debts, allocating a portion of the withdrawn funds towards repayment can provide financial relief and improve your overall financial health.

The Role of a Financial Consultant in Fund Management

Engaging with a financial consultant is instrumental in optimizing the management of your withdrawn PF and EPF. Their expertise extends to:

  1. Strategic Investment Guidance: A financial consultant can provide tailored investment advice, helping you make informed decisions based on your financial goals and risk tolerance.
  2. Tax Planning: Efficient tax planning is essential post-withdrawal. A financial consultant can guide you on tax implications and strategies to minimize tax liabilities.
  3. Wealth Growth Strategies: With a focus on long-term wealth growth, financial consultants can recommend diversified investment portfolios to maximize returns.

Conclusion: Empowering Your Financial Transition

In conclusion, your employer deducts the Provident Fund (PF) from your pay each month. You can claim your PF amount when you retire or quit. By filling out the "Composite Claim" form found on the EPFO website, you can get your money back. Before filing a claim, the information about PF withdrawal provided in this article must be carefully read. A comprehensive comprehension of the procedure facilitates a seamless withdrawal encounter and empowers you to make knowledgeable choices regarding your Provident Funds after retirement or resignation.

Withdrawing PF and EPF after leaving your job is a significant financial decision. By following the step-by-step guide and leveraging the expertise of a financial consultant, you can ensure a seamless transition. Empower yourself with the knowledge to make informed choices, turning this period of change into an opportunity for financial growth and stability.

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